Fed minutes flag concern over tariffs. According to the minutes of the US Federal Reserve’s June meeting, some businesses indicated they had already “scaled back or postponed” plans for capital spending due to “uncertainty over trade policy”, while several others voiced concern about the impact of trade restrictions on future investment. The minutes show that policymakers detected rising concern among US business about the potentially harmful impact of tariffs, as growing trade tensions prompt some executives to freeze investment plans. Trade worries, however, are not eclipsing more positive news about the US economy. At the meeting, Fed officials raised interest rates by a quarter of a percentage point to a 1.75-2.00 percent range and signalled that two more increases are likely in 2018 as they gave a rosy assessment of the economy.German factory orders rise in May, ending downward trend. German factory orders surged in May, ending a series of declines and point to a much-awaited pick-up in growth momentum in Europe’s largest economy. The 2.6 percent rise in orders was more than twice as strong as the 1.1 percent forecasted by economists. It is also the first increase this year, although one should note that this data can at times be volatile. There has been a mixed batch of indicators recently which show that the German economy is cooling, with industrial production dropping at the start of the second quarter and mild manufacturing activity in June. However this week’s factory orders report supports the Bundesbank’s bullish view that the economy’s weak start to the year will prove temporary.UK services sector bounces back in June. The UK economy bounced back from a soft patch in the first months of 2018, according to a closely watched survey of the services sector that showed stronger than expected activity in the month of June. The IHS Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index (PMI) for the service sector improved to 55.1 in June from 54.0 in May. Economists had forecast the index to remain unchanged. In the latest sign that bad weather held back the economy during the first quarter, the measure showed the strongest growth in eight months. A breakdown of the survey showed that demand was strong for business and financial services, while the hot weather led to a pickup in consumer spending in bars and restaurants.Closely-watched China manufacturing slips in June. The China Caixin/Markit manufacturing purchasing managers’ index (PMI) for June came in at 51.0, slightly down from 51.1 in May as new export sales fell for the third consecutive month. Economists had expected the gauge to slip to 51.0. Separately, China’s official PMI, showed that manufacturing activity fell to 51.5 in June from 51.9 in May. The June new export orders index contracted for the first time since February, dropping to 49.8 from 51.2 in May. Still, the two headline PMI readings were above 50, indicating expansion in manufacturing activity. A reading below 50 would signal contraction.Australian central bank keeps rates on hold as global worries mount. The Reserve Bank of Australia (RBA) held interest rates at the emergency low of 1.5 percent for a record 21st meeting in a row. The RBA has not changed its rates since August 2016 when the cash rate was reduced to the current all-time low. The decision was entirely in line with expectations which have seen market forecasts of a rate hike pushed further into the future. While the bank has signalled it expects the next move to be up, it has been hampered by sluggish inflation, near record low wages growth and tightening credit.Turkey’s inflation hits 14½ year high. Turkey's consumer price inflation accelerated to a more than 14-year high in June on a weaker currency. Inflation quickened to 15.39 percent in June from 12.15 percent in May, the Turkish Statistical Institute reported this week. Economists' expected the inflation to rise to 13.9 percent. Moreover, this was the strongest inflation rate since January 2004, when prices had surged 16.22 percent. The much stronger-than-expected rise in Turkish inflation in June is likely to prompt the central bank to hike interest rates, at its meeting later this month.
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